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Gauging Wisconsin’s 2013 Taxes

Total Tax Burden Accelerates, Slows at State-Local Level

November 2013

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Total state and local taxes in 2013 rose for the fourth consecutive year to $27.4 billion, a 2.1% increase from last year. Because total state income grew faster (3.9%), Wisconsin’s state-local tax burden fell slightly to 11.3% of personal income. However, a 6.6% increase in federal tax collections pushed up the total tax burden from 29.4% to 29.7% of personal income. Of the three largest state taxes, individual income tax collections increased 6.5%, sales taxes rose 2.8%, and unemployment tax collections fell 3.3%.

Tax collections fluctuate with economic conditions and tax law changes. In 2013, a recovering economy combined with tax hikes boosted federal collections from state residents 6.6% to $44.2 billion. Federal taxes now claim 18.3% of state personal income, compared to 17.9% in 2012 (see Table 1 on page 3).
A stronger economy also buoyed state tax collections, although growth was limited by declining unemployment taxes (see page 3). Total state collections rose 2.8% to $17.4 billion in 2013. With incomes rising slightly faster (3.9%), state taxes as a share of personal income dropped from 7.3% in 2012 to 7.2% in 2013.
Local taxes—mostly property taxes—are less susceptible to the ups and downs of the economy. However, recent tightening of state-imposed property tax limits held local collections in check. Total local tax collections ticked up 0.9% to $9.9 billion, claiming 4.1% of state income vs. 4.2% in 2012.
Due primarily to the rise in federal taxes, Wisconsin’s total tax burden rose slightly this year from 29.4% to 29.7% of personal income. However, it remains significantly below the 1998 level of 37.4% (see Figure 1, page 2).